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Video: Jobs are going to come, Geithner says

Closed captioning of: Jobs are going to come, Geithner says

>>>so how is the state of the
u.s. economy
in the wake of the worst recession since the great depression? we sat down for an exclusive interview with treasury secretary tim
geithner
in pittsburgh on wednesday where he was meeting with local business and labor leaders. we began our conversation with the big issue on the minds of many americans -- unemployment. everybody wants to talk about jobs and the numbers are coming out on friday. right now, 9.7%. that's where it stands. it's been stubborn. do you see any real sign that there's going to be progress in the unemployment number?

>>i think the key thing that's going to happen is the economy's going to start creating jobs again. you'll start to see businesses across the country start to add to payroll again. that's going to come -- the economy's growing now. that's the first step. but with growth, more jobs will come. but the
unemployment rate
is still terribly high and it is going to stay unacceptably high for a long period of time. it is going to take a long time to bring it down because of the damage of the recession.

>>you took some heat on
capitol hill
recently. an ohio democratic representative looked at you and said i don't think you're talking enough about jobs and that's what my people, my constituents, want in my community. when you say that the economy's going to start to create jobs, why hasn't it created jobs to this point?

>>just because this was the worst
economic crisis
since the great depression. huge amount of damage done to businesses, families across the country. we're going to be living with that damage for some time. just going to take us a while to heal that damage. but look at what the president did. he came in and did the largest, most forceful package of support for the economy we had considered doing in 50 years and he moved very aggressively to fix what was broken.

>>but as you know, i spoke to the president just a couple of days ago. when you bring up the prospect of a
jobless recovery
, he does not discount it. he doesn't say, no, it definitely won't happen. he's worried that some of these jobs that we've lost over the last couple years may never come back.

>>we're all very worried that it is going to take time. it is going to take time to bring back what we lost. but again, that's why he's working so hard to make sure that congress is providing additional support for
job creation
, more support for
small business
, more support for infrastructure, more support for cities and states across the country.

>>here's what you said to "the new yorker" magazine, "my basic view is that we did a pretty successful job of putting out a severe
financial crisis
and avoiding a great depression. we saved the economy but we kind of lost the public doing it." what do you mean, you lost the public?

>>as the president said many times, we had to do some very unpopular things. people looked at what had happened, they saw people in the financial community having made terrible mistakes that caused millions of lost jobs, millions of lost homes. but to help them to protect them from the damage, we had to come in and do things that were going to help those banks, help those companies. but if we hadn't done that, matt, if we hadn't done that, you would have seen millions more jobs lost and hundreds of thousands of more companies having to shut their doors. that is the basic sense of unfairness which is driving so much anger and frustration across the country.

>>and you understand that anger and frustration.

>>absolutely.

>>when someone's out there and haven't gotten the job that they lost two years ago, and they get the feeling that business on
wall street
has returned to normal, and the executives are getting big bonuses again, and they still can't pay for their mortgage or are underwater, they say where is the fairness in this?

>>it is not fair. it is deeply unfair and they should be angry about it. but again, what was the
choice
the president had to make? he had to decide whether he was going to act to fix it or stand back, because it would be -- might be more popular not to have to do that kind of stuff, and that would have been calamitous for the
american economy
. much worse than what we went through already.

>>you're saying the president made the right choices to stop the bleeding at the time. now some are worried the right choices aren't being made to prevent the problem from happening again. when they look at financial reform that's working for the senate right now, they say one of the major components that's missing in this, secretary
geithner
, is the prevention of this too big to fail scenario.

>>that's not missing. that's at the center of the --

>>but do you think it will have enough teeth, that it will absolutely prevent companies and banks from getting to the point where the government has to step in to bail them out?

>>the president's not going to sign a bill, doesn't have strong enough teeth. again the key things financial reform has to do, it has to give consumers, families and businesses basic protections against fraud, people who want to buy a new home, send their kids to college, buy a car, borrow to finance a
health care
expenditure, we provide basic protections for them so they don't get taken advantage of.

>>let me go back to
wall street
for a second and these bonuses which is such an emotional hot-button issue.
michael lewis
said recently, he called them a very elegant form of theft. would you agree with that?

>>what happened in our country should never happen again. people were paid for taking enormous risks. if those risks turned out well, they made a lot of money. if they turned out that they
lost money
, they were not exposed to loss. it was a crazy way to run a
financial system
and it helped contribute to the kind of
excess risk
taking that you saw across the country. and it is the government's job -- this is a job for governments to do a better job of constraining that kind of risk taking.

>>and for somebody in pittsburgh here who's struggling to make ends meet and they find out that the banks can borrow money at 0%, then the bank turns around and charges them 26% on their
credit card
, they say what's up with this?

>>this system was not good for consumers, for the
average american
. so many of them got taken advantage of. but it wasn't good for businesses either. the key test of a
financial system
is do we do a good job of taking the savings of americans and using those savings to finance growing companies. that's the key test. and this system was not good for business because it was subject to these big booms and busts. they took a bunch of resources and put them into
real estate
rather than productive companies. that's why reforms are so important.

WASHINGTON — Treasury Secretary Timothy Geithner said Thursday it's "deeply unfair" that some financial institutions that got taxpayer-paid bailouts are emerging in better shape from the recession than millions of ordinary Americans.

He acknowledged public outrage over that and said people watched with disdain as Washington protected high-risk banks and investment houses, even as the national unemployment rate was soaring to double-digit levels for the first time in a generation.

But in a "TODAY" show interview, Geithner also argued that President Barack Obama had no choice when confronted with a financial crisis.

"As the president has said, we had to do some very unpopular things," Geithner said. "People looked at what had happened."

"It's not fair. It's deeply unfair," he said. "He (Obama) had to decide whether he was going to act to fix it or stand back ... and that would have been calamitous for the American economy."

The government eventually embarked on a program of assisting the threatened financial institutions, and the sweeping, multibillion-dollar Troubled Asset Relief Program created as a bailout engine.

Geithner also said that administration officials are "very worried" about recovering the more than 8 million jobs lost in the recession. But he noted that business growth has been improving and expects the economy "is going to start creating jobs again."

The secretary agreed that the national jobless rate — now at 9.7 percent — is "still terribly high and is going to stay unacceptably high for a very long time" because of the damage caused by the recession.

"Just because this was the worst economic crisis since the Great Depression," Geithner said, "a huge amount of damage was done to businesses and families across the country ... and it's going to take us a long time to heal that damage. "

More than 11 million people now are drawing unemployment insurance benefits, and the overall jobless rate of 9.7 percent understates the true level of economic misery because many people who give up looking for work are no longer in the official count of the unemployed. The Bureau of Labor Statistics on Friday will release a report on conditions in the labor markets in March.

A report Thursday said that initial claims for unemployment benefits fell slightly last week as the recovering economy moves closer to generating more jobs. The Labor Department said new jobless benefit claims dropped 6,000 to a seasonally adjusted 439,000, nearly matching analysts' estimates. It's the fourth drop in five weeks.

Geithner said he hopes skeptical voters will note legislation moving through Congress to bring reforms to the financial system.

"What happened in our country should never happen again," he said. "People were paid for taking enormous risks. It was a crazy way to run a financial system." Geithner said, "It's the government's job ... to do a better job of restraining that kind of risk-taking."

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